A Dutch cocoa processor’s pension scheme is to become the first client of the general pension fund (APF) Volo, founded last year by PGGM.
The €265m Pensioenfonds Jan Huysman Wz – a closed scheme for employees of cocoa processor ADM – wants to transfer its pension rights to Volo, according to the scheme’s annual report.
Pensioenfonds Jan Huysman Wz closed last year. Since then, new pension accrual has been through the confectionary sector scheme bpf Zoetwaren.
However, the board decided not to transfer the closed scheme to bpf Zoetwaren because it had a higher risk profile than Jan Huysman. A survey of participants showed that they wanted to keep the current defensive profile, said chairman Raimond Siebesma.
The Jan Huysman fund had 23% of its portfolio invested in equities in 2016, and had hedged 75% of its interest rate risk. Zoetwaren decided to increase its risk profile in 2015. It gradually reduced the interest rate hedge to 40% and increased the allocation to its return-seeking portfolio to 60%, according to its annual report.
The Jan Huysman scheme will be placed in one of the two multi-employer sections of Volo. The chosen section has a similar defensive investment policy. For the time being, the scheme’s participants are the only members in that section.
The board’s decision of the fund has been approved by the accountability body and by participants, and is now waiting for the consent of regulator De Nederlandsche Bank (DNB).
Before it can complete the transfer, it must also wait for the Dutch parliament to pass the Pensions Act 2017. One of the laws included in the bill – currently in the Dutch senate (Eerste Kamer) – would mean that if a closed pension fund passes to an APF, the employer does not need to sign an executive agreement with the APF.
The Sanoma Pension Fund, which signed up to the APF Step in early 2017, is also waiting for this law to be finalised before completing its transfer.
The board of Pensioenfonds Jan Huysman Wz said it hoped to have completed the transfer to Volo by the end of the year.
BNP Paribas IM, NN IP and Legal & General currently manage the cocoa processor’s scheme’s portfolio. At Volo, both implementation and fiduciary management are performed by PGGM, the asset manager for healthcare scheme PFZW.
Jan Huysman Wz is the first client for the Volo APF, and Volo is the last APF to announce its first client. Volo was the fifth APF to come to market, after the funds launched by insurers Centraal Beheer, Delta Lloyd and ASR. Aegon and NN Investment Partners have jointly launched an APF.